QBE Technical Claims Brief June 2011

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Contents

Monthly update June 2011

News 1

Justice Minister announces

consultation on Discount Rate 1

New rules for uninsured vehicles

come into effect 2

Government publishes Strategic

Framework for Road Safety 2

Fraud 3

Claimant less disabled than claimed

but not dishonest: Connery

v PHS Group Ltd High Court (2011) 3

Criminal standard of proof for

contempt not met: Bruce Montgomery

v Carl Brown High Court (2011) 4

Liability 5

Homeowner not liable under Health

and Safety Regulation: Kmiecic

v Isaacs Court of Appeal (2011) 5

No liability for ice falling from lorry:

A. Glen v John Pearce (Glynneath) Ltd

Liverpool County Court (2011) 6

Parent Company owed Duty of Care

to Asbestosis victim: David Chandler v

Cape plc - High Court (2011) 6

Publicans did not owe Duty of Care to

drunk driver: Flanagan v Houlihan and

Kelly and Kelly (Third Parties)

- Irish High Court (2011) 7

Quantum 8

Loss of Society Awards must be guided

by Juries: Bellingham v Todd Court of

Session Outer House (Scotland) (2011) 8

Disclaimer 9


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T m , moty pdt J 2011

1

News

Justice Minister announcesconsultation on DiscountRate

In a written Parliamentary answer,Justice Minister Simon Djanogly MP has

announced that the Lord Chancellor has

decided to issue a consultation paper

inviting views on the methodology of

reviewing the discount rate in England and

Wales.

The announcement comes shortly

after the Association of Personal Injury

Lawyers issuing proceedings for a judicial

review in apparent frustration at the Lord

Chancellors delay in commencing a

review (see May 2011 Brief).

Comment: the Lord Chancellor had stated

that the review would be conducted on

a narrow basis having regard only to

investment return from gilts. The broader

consultation should be welcomed by

those opposing a decrease in the rate as

it will allow them to put forward arguments

about the effects of change and the

availability to defendants of periodical

payments which would protect them from

poor investment returns.

The Scottish Government and Northern

Irish assemblies have devolved powers

to set their own rates. There has been

speculation that the Scottish Government

may opt for a lower rate than England and

Wales in line with its aim to make Scotland

the forum of choice for litigation.


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2

New rules for uninsuredvehicles come into effect

With effect from 20 June 2011 the owners

of uninsured vehicles can be prosecuted

and fined up to 1,000 regardless of

whether they actually drive the vehicle

on the highway or not. Under current

legislation uninsured motorists can only be

prosecuted if they are caught driving on

the public highway by the police.

Only those vehicle owners who have

submitted a SORN (Statutory Off Road

Notification) to say that their vehicle will not

be used or parked on the highway will be

exempt from prosecution.

Comment: the new rules are intended to

combat the problem of uninsured drivers

who kill an estimated 160 and injure

23,000 people in the UK annually.

Government publishesStrategic Framework forRoad Safety

The UK Government published its

Strategic Framework for Road Safety

on 11 May 2011 making a number of

proposals for improvement:

Onthespotfinesof80-100tobe

levied by Police for minor incidents of

careless driving such as undertaking,tail-gating and cutting in front of other

vehicles

Anewoffencefordriversfoundto

have drugs present in their blood

stream which would remove the need

to prove that they were actually unfit

to drive (development work on a

drugalyzer is underway)

Greateruseofdrivereducationas

an alternative to prosecution for less

serious offences

Anextendedcompulsorydriving

test for drivers finishing a period of

disqualification

Increasingthefixedpenaltyfordriving

offences to 80 or 100.

Full details of the framework may be

viewed at:

www.dft.gov.uk/pgr/roadsafety/

strategicframework/

Comment: unlike previous road safety,

strategy documents there are no targets

for reducing casualties. This has drawn

criticism from groups like Brake which

campaign for improved road safety. It is

unlikely that any of the proposed measures

will be implemented prior to 2012.
http://www.dft.gov.uk/pgr/roadsafety/strategicframework/http://www.dft.gov.uk/pgr/roadsafety/strategicframework/http://www.dft.gov.uk/pgr/roadsafety/strategicframework/http://www.dft.gov.uk/pgr/roadsafety/strategicframework/


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Fraud

Claimant less disabled thanclaimed but not dishonest:Connery v PHS Group Ltd High Court (2011)

The claimant suffered a whiplash injury

after the car she was driving was struck

in the rear by one of the defendantsvehicles. She claimed that initial pain in

her neck and right leg developed into

severe pain spreading to her right arm and

hand, greatly reducing her mobility and

preventing her from returning to work as a

community and twilight hours nurse. She

was diagnosed with Complex Regional

Pain Syndrome (CRPS) with a poor

prognosis for recovery.

The defendants medical experts believed

her to be a malingerer. The defendants

insurers obtained surveillance evidence

showing the claimant carrying some light

items in her right hand, driving and walking

some distance with a stick. When the

surveillance evidence was disclosed to

the claimants experts, they revised her

prognosis to good.

The issues before the court were whether

the claimant had any genuine disability

and if so was it due to CPRS arising from

the accident, what was the prognosis

and what was the appropriate level ofdamages?

The court held that the claimant did

suffer from CPRS with some genuine

disability and that based on the timing of

the onset of symptoms, it was caused by

the accident. Her level of disability was

less than claimed but this was due to

her mistaken perception rather than any

attempt to mislead the court for financial

gain (sic). Her prognosis was good and

she should be able to return to nursing in

12 months albeit with a 25% reduction in

her hours. She was awarded her past loss

of earnings to date and future loss for a

year with compensation for her reduced

hours thereafter. She was also awarded

general damages of 20,000 and a lump

sum of 50,000 to reflect her diminished

promotion prospects.

Comment: this case illustrates some

of the common themes of chronic

pain claims. The degree of disability is

often exaggerated either consciously or

unconsciously and surveillance can prove

a valuable tool in reducing claims. Insurers

are often suspicious of chronic pain claims

from nurses and others such as firemen

whose occupations involve a lot of heavy

lifting and inevitable strain on the back,

neck and arms. If there are no records

of significant pain pre-accident a court is

likely to accept that post accident pain is

accident related.


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Criminal standard of prooffor contempt not met: BruceMontgomery v Carl Brown High Court (2011)

The claimant was injured in a road traffic

accident. The defendant conceded

primary liability and the claimant received

damages of 63,750 net of 25%

contributory negligence.

Documents subsequently came to light

that suggested that the claimant had not

been truthful about his employment after

the accident. The defendant brought

proceedings against the claimant for

contempt of court alleging that the

claimant had lied in both statements and

documents verified by statements of truth

and to medical experts. He had claimed to

have done very little or no work whereas in

reality he was undertaking well paid workoften overseas, a year and a quarter post

accident. The defendant alleged that the

claimant had deliberately and dishonestly

presented an inflated claim.

The claimant admitted to making some

misleading and incorrect statements and

to being careless and irresponsible in

the way in which he had presented his

case but denied any dishonest intent and

complained that he had been ill served by

his solicitors.

The claimant had given his solicitors full

details of his post-accident employment

and had signed a mandate enabling the

defendants insurers to have access to his

employment records. He had claimed to

have only part-time work but the ad hoc

nature of his employment, in the judges

view, made the part-time description not

entirely untrue.

Whilst the Respondent must

accept, and does accept, his share

of the blame for various aspects

of his handling of the claim, on the

material before me there are real

and legitimate concerns as to the

extent to which this Respondent

was provided with the advice

and assistance he was entitled

to expect from the solicitors

representing him.

The Honourable Mrs Justice Cox

DBE

The claimant had not expressly authorised

his solicitors to sign statements of truth

on his behalf and they had failed to warn

him of the consequences of signing false

statements.

Dismissing the case against the

claimant the judge held that in all the

circumstances, including concerns over

the conduct of the claimants original

solicitors, there was a degree of doubt

as to whether the claimant was guilty

of contempt and he was entitled to the

benefit of it.

Comment: this case illustrates the

difficulty that insurers face in trying to

deter exaggerated claims by having

claimants committed for contempt. The

test for contempt in these circumstancesis that a claimant must be proved to have

knowingly made false statements, which

they were aware, would interfere with the

course of justice and this proved beyond

reasonable doubt. The test is not an easily

met one.


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Liability

Homeowner not liable underHealth and Safety Regulation:Kmiecic v Isaacs Court ofAppeal (2011)

The claimant was seriously injured when

he fell from a ladder whilst carrying roofing

material up to the flat roof of a domesticgarage. The claimants employer was

uninsured and so the claimant brought

an action against the householder who

owned the property he was working on.

The claimant argued that the defendant,

who had refused to allow him to access the

garage roof by climbing out of a bedroom

window, had effectively taken control

over his work and had forced him to use

an unsuitable ladder to access the roof.

Because of this control over how the work

was done, the defendant had adopted

a duty to ensure the claimants safety

under the Construction (Health Safety

and Welfare) Regulations 1996and the

Work at Height Regulations 2005. At first

instance the judge rejected this argument.

The defendant had done no more than

exercise her right to decide whom she

permitted to enter her home. Although the

ladder was obviously inadequate and had

come from the defendants garage, she

had not selected it. It was the claimantsemployer, who was responsible for both

the means of access and the selection of

equipment.

The claimant appealed arguing that the

1996 and 2005 regulations imposed a duty

on occupiers who exercised control over

the means of access to their property.

The Court of Appeal rejected these

arguments. Although the regulations

could impose a duty on persons others

than employers it did so only if they had

adopted control of the work carried out.

Control of the means of access did not

mean that an occupier had adopted

control of the work as defined in the

regulations. To impose such a duty

on a householder who knew nothing

about construction would be against the

objectives of the regulations.

Comment: a householder who declines

to let builders access work by entering

their homes will not be deemed to have

adopted a duty for their safety but anyone

who starts directing how work should

be carried out runs the risk of being held

liable under the regulations. The question

of control is judged on the facts of each

individual case.


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No liability for ice falling fromlorry: A. Glen v John Pearce(Glynneath) Ltd LiverpoolCounty Court (2011)

The claimant sought compensation for

injury and vehicle damage after a large

block of ice fell from the top of the trailer

towed by the defendants lorry and struck

his windscreen. The defendants insurersQBE denied liability on the grounds that,

there was no requirement under the Road

Haulage Association Operators Licence

to inspect the roofs of lorry cabs or trailers

and that such inspections were neither

reasonable, safe or practical.

The trial judge accepted the defendant

drivers evidence that he had not had to

defrost his windscreen and thus had not

been put on notice of the risk of ice. She

also accepted that he had no general

duty to check for ice on the top of the

trailer and gave judgment in favour of the

defendant.

Comment: Congratulations go to

Sukhvinder Kaur of QBE (ably assisted by

Richard Edgecombe of Plexus Law) for

maintaining a firm denial of liability.

Parent Company owed Dutyof Care to Asbestosis victim:David Chandler v Cape plc -High Court (2011)

The claimant had developed asbestosis

whilst working for a wholly owned

subsidiary company of the defendants.

By the time the claimant discovered he

had developed the disease his employers

were no longer trading and there was

no Employers Liability policy covering

the period of his employment. Seeing

no prospect of making a recovery from

his employers, the claimant successfully

brought an action against his employers

parent company (still trading) on the basis

that they were jointly liable.

In finding for the claimant, the High Court

had applied the three-stage test set

out in the House of Lords decision of

Caparo Industries Plc v Dickman (i.e.

foreseeability, proximity and whether it

was fair, just and reasonable for there to

be a duty of care in the circumstances).

The risk of asbestosis from the claimants

exposure to asbestos dust was obvious

and the defendants were well aware of

the working conditions at their subsidiary.The test for proximity was also met as the

parent company employed specialist staff

to advise on health and safety matters for

all staff including subsidiary companies.

The defendants also had a high degree

of control over the employers working

practices and considering all the facts of

the case it was fair, just and reasonable to

hold that there was a duty of care on the

part of the defendants.

Comment: the trial judge was at some

pains to point out that the case turned

on its specific facts. Simply because a

company was the parent company of a

negligent employer did not mean that a

duty of care would exist; the Caparo test

must be met.


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Publicans did not owe Dutyof Care to drunk driver:Flanagan v Houlihan andKelly and Kelly (Third Parties)- Irish High Court (2011)

The plaintiff was seriously injured in a road

traffic accident involving a drunk driver

John Connolly who was found to be three

times over the legal limit. Connolly waskilled in the crash along with the plaintiffs

daughter.

The plaintiff sued Connollys estate who

in turn brought Third Party Proceedings

against Mr and Mrs Kelly who owned the

bar where Connolly was drinking prior

to the accident. The representative of

the estate argued that the Kellys were

negligent in serving Connolly more than

two pints of beer given that he was likely

to have been driving and were in breach

of the criminal law by supplying alcohol to

an obviously drunk customer. They were

also negligent in failing to prevent him from

driving home.

The judge rejected all these arguments.

It had not been established that Connolly

was drunk within the meaning of the

Intoxicating Liquor Act 2003. He did not

appear intoxicated or incapable of taking

care of himself. He had been a regular

customer at the Kellys bar and had been

known to leave his car there when he felthe had had too much to drink.

The judge was not willing to place an

impossible burden on publicans by

finding that they had a duty to question

every customer as to their plans for

travelling home. Neither could they be

expected to restrain or falsely imprison

customers to stop them leaving as this

would amount to a criminal act.

Comment: in reaching his decision,

the judge followed the approach of

English and Australian courts that held

that there was generally no duty owed

to the intoxicated without either an

assumption of responsibility or exceptional

circumstances.


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Quantum

Loss of Society Awardsmust be guided by Juries:Bellingham v Todd Courtof Session Outer House(Scotland) (2011)

Following the death of a motorcyclist, the

judge in this Scottish jurisdiction casemade the following awards under Section

1 (4) of the Damages Act (Scotland) 1976

(known as loss of society awards) to the

bereaved relatives:

Pursuer Award

Mrs Alison Bellingham

(widow)50,000

Ben Bellingham (son) 25,000

Abbie Bellingham (daughter) 25,000

Clifford Bellingham (father) 15,000

Mrs Kathleen Bellingham

(mother)15,000

Mark Bellingham (brother) 10,000

Steven Bellingham (son) 15,000

Total 155,000

In assessing the damages the judge

commented that this was a jury question

because awards should reflect the

expectations of society and that jury

awards therefore provided a surer guide

to the correct level of damages than past

awards made by judges.

Comment: the overall award of 155,000

is in sharp contrast to the statutory

bereavement award of 11,800 that

qualifying relatives would have had to

share between them had the case fallen

under the jurisdiction of England and

Wales.

The rate of increase of jury awards in fatal

claims is a great concern to insurers and

other compensators operating in Scotland.

The bad news for these compensators

is that as and when a consistent pattern

of damages emerges from jury awards,

Scottish judges will be obliged to refer to

them in assessing damages.


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Completed 25 May 2011 written by and

copy judgments and/or source material

for the above available from John Tutton

(contact no: 01245 272 756, e-mail: john.

[email protected]).

Disclaimer

This publication has been produced by

QBE Insurance (Europe) Ltd (QIEL).QIEL is a company member of the QBE

Insurance Group.

Readership of this publication does not

create an insurer-client, or other business

or legal relationship.

This publication provides information

about the law to help you to understand

and manage risk within your organisation.

Legal information is not the same as legal

advice. This publication does not purport

to provide a definitive statement of the law

and is not intended to replace, nor may it

be relied upon as a substitute for, specific

legal or other professional advice.

QIEL has acted in good faith to provide

an accurate publication. However, QIEL

and the QBE Group do not make any

warranties or representations of any kind

about the contents of this publication, the

accuracy or timeliness of its contents, or

the information or explanations given.

QIEL and the QBE Group do not have

any duty to you, whether in contract, tort,

under statute or otherwise with respect to

or in connection with this publication or the

information contained within it.

QIEL and the QBE Group have no

obligation to update this report or any

information contained within it.

To the fullest extent permitted by law,

QIEL and the QBE Group disclaim any

responsibility or liability for any loss or

damage suffered or cost incurred by you

or by any other person arising out of or in

connection with you or any other persons

reliance on this publication or on the

information contained within it and for any

omissions or inaccuracies.

QBE Insurance (Europe) Limited and

QBE Underwriting Limited are authorised

and regulated by the Financial Services

Authority. QBE Management Services

(UK) Limited and QBE Underwriting

Services (UK) Limited are both Appointed

Representatives of QBE Insurance

(Europe) Limited and QBE Underwriting

Limited.


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